Microsoft's Yahoo Bid May Have the Right Stuff

The Silver Lake consortium is one of a number of parties bidding for a minority stake in Yahoo, but their offer has a number of factors that makes them a major contender. The consortium includes Microsoft - that already is working with Yahoo - and an offer for a new CEO with a proven successful track record.

The deadline for bid submissions was end of business yesterday.

"Yahoo appears increasingly less interested in selling itself as a whole. In recent weeks, the company's directors and advisers have gravitated toward plans that call for an investor or consortium to buy a stake of as much as 20 percent," the New York Times reported.

The Silver Lake consortium also includes venture capital firm Andreessen Horowitz. Marc Andreesesn has been discussed as a possible CEO since Carol Bartz was fired. As a three year board member, he knows the executives. As the co-founder of Andreessen Horowitz he knows a good investment and has great contacts in the online space - other boards he sits on include eBay, Hewlett-Packard, and Facebook.

But it is as co-author of Mosaic - the first major browser - and the co-founder of Netscape that really makes his possible leadership of Yahoo a solid decision. Andreessen is also, more importantly, a software engineer who is well-known for his successful evangelism of Mosaic in its infancy. Yahoo needs a leader that can get the public excited about Yahoo again.

Many people would have first found Yahoo with a Netscape browser - early users could have accessed "Jerry and Dave's Guide to the World Wide Web" with their Mosaic browser. Mosaic became Netscape because the University of Illinois, where Andreessen and Eric Bina worked National Center for Supercomputing Applications (NCSA) and developed the graphical browser, didn't want Andreessen using the name for his commercial venture.

Andreessen has been suggested for the position by a number of stockholders, but had been hesitant possibly because of his close friendship with Jerry Yang - current CEO and co-founder of Yahoo, the Wall Street Journal reported.

"In meetings with Yahoo execs, several sources noted that Andreessen was unusually blunt about the problems Yahoo faces and its mistakes in the past. They noted as well his reticence over the amount of work required to make a difference.

'He seemed very negative on the idea of whether anyone had what it took to turn it around,' said one exec."

Obviously, he's changed his mind.

Other interesting bidders include Alibaba - Yahoo has a 40 percent stake in the company so it would be a way to reclaim that and a perfect way to enter the market outside of Asia - and Thomas H. Lee Partners who are looking to acquire just the U.S. operations.

THL "is hoping to do a leveraged buyout of Yahoo's U.S. business - which could be worth $5 billion to $6 billion - and draw on its experience running other media assets such as Nielsen Co, Clear Channel and Univision to turn around the ailing company," Reuters reported.

About the author

Frank Watson has been involved with the Web since it started. For the past five years, he headed SEM for FXCM -- at one time one of the top 25 spenders with AdWords. He has worked with most of the major analytics companies and pioneered the ability to tie online marketing with offline conversion.

He has now started his own marketing agency, Kangamurra Media. This new venture will keep him busy when he is not editing the Search Engine Watch forums, blogging at a number of authoritative sites, and developing some interesting online community sites.

He was one of the first 100 AdWords Professionals, a Yahoo and Overture Ambassador, and a member or mod of many of the industry forums. He is also on the Click Quality Council and has worked hard to diminish click fraud.

The U.K. Supreme Court has granted permission in part for Google to appeal against a ruling relating to a dispute over the user information through cookies via use of the Apple Safari browser.
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